The disinvestment of IDBI Bank is on track and is likely to be finalised in the next three to four months, said DIPAM Secretary Arunish Chawla. In an exclusive interview with CNBC-Awaaz, Chawla said, “We have resolved the data room issues. Due diligence has been completed. You will hear good news on this front in the next 3-4 months.” However, when asked about the timeline or the possibility of a financial bid in the first quarter of the next financial year, he declined to specify a deadline.
The government of India and the Life Insurance Corporation of India (LIC) plan to jointly offload a 61% stake in the lender, which includes 30.48% held by the Centre and 30.24% by LIC. In January 2023, the Department of Investment and Public Asset Management (DIPAM) had issued an Expression of Interest (EoI). The names of the interested bidders were sent to the Reserve Bank of India (RBI) for scrutiny. After obtaining RBI clearance, the shortlisted bidders were granted access to IDBI Bank’s data room.
When asked about the progress of the disinvestment of Shipping Corporation of India and BEML, the DIPAM Secretary declined to comment or provide specific details. However, Chawla reaffirmed the government’s commitment to strategic disinvestment, stating, “We take a call on the strategic sale of PSUs at the right time. As of now, the government has approved around 60 CPSEs for strategic sale or closure. Out of these, the process for 30 CPSEs has been completed, and the private sector is performing well in these companies. Ten PSUs have been closed, and the process for the remaining companies is on track.”
Chawla further emphasised that the government follows a ‘calibrated disinvestment’ approach, ensuring that disinvestment happens strategically, based on market conditions and corporate performance to maximize value.
During the interview, Chawla also highlighted the government’s focus on PSU dividend policy, stating, “The government ensures that PSUs adopt a fair and sustainable dividend policy. CPSEs are required to distribute at least 30% of their profit after tax (PAT) or 4% of their net worth, whichever is higher, as dividends. This ensures that even if the stock market is down, minority shareholders continue to receive higher dividends. Investors, senior citizens, and mutual fund houses should allocate a portion of their portfolios to PSU stocks.”
Supporting his argument, Chawla pointed out that PSUs are expected to pay 10% higher dividends to minority shareholders in the current financial year, amounting to Rs 1.4 lakh crore. He also projected that dividends will increase by another 10% in the next financial year compared to the current one.
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